340 Chugging instead of Reving

That picture is NOT TDC-overlap, the engine would NOT run at all if it was.....
Pull the plug and see where the piston is.
Since the valves on the next cylinder in the line appear to be closed and probably with the Piston at TDC, my guess is that your balancer is marked wrong. or you just erred.
In any case, find true TDC of *1 piston, prove the piston is at the top.